A fresh start for Tulsequah Chief

Wednesday January 26, 2011

By John Thompson

Where many of us would see bright-orange pools of sulfuric acid, Victor Wyprysky sees a business opportunity.

The unsightly mess was left behind from mining at Tulsequah Chief, approximately 100 kilometres south of Atlin, BC.

The mine shuttered more than 50 years ago, but pools of waste water - some of which is dripping into the nearby river - remain.

Wyprysky is president and CEO of Chieftain Metals. It bought Tulsequah Chief and another nearby mine property named Big Bull off the receiver’s auction block last autumn, after its debt-ridden predecessor, Redcorp Ventures, blew up following the global financial crisis.

Wyprysky is an investment banker by trade, and he intends to ensure Chieftain Metals, unlike its predecessor, has enough cash on hand to pay for its commitments - starting with the acidic mess.

The company raised $17.5 million through its initial public offering in late December. This ought to allow Chieftain Metals to succeed where Redcorp and others have failed, and build a water treatment plant by this autumn.

The company also plans to spend almost $7 million on exploration work this year, drilling 15 kilometres of ore samples in existing underground tunnels and an additional eight kilometres above ground. Chieftain Metals suspects there’s a lot more metal in the ground than previous miners knew.

One appealing feature of Tulsequah Chief is that the deposit contains many types of metal: copper, lead, zinc, gold and silver. And much of the known resources are high grade and at an advanced exploration stage.

“You combine all those things and put them in a country as attractive as Canada, and it’s hard to beat,” said Wyprysky.

But the project, under Redcorp, was always controversial, chiefly because of the company’s proposed method of taking the metal to market.

It first planned to build a 160-kilometre road to Atlin. The prospect of cutting a road this long through pristine wilderness raised the opposition of conservationists. It would also be pricey. So Redcorp developed another plan, which proved even more controversial.

It proposed hauling metal year-round down the Taku River to nearby Juneau. Tugboats would haul barges during the summer. In winter, tractors and treaded vehicles would haul a hoverbarge, designed to float upon a cushion of air.

This plan came under fire from Rivers Without Borders and other environmental groups, who worried about heavy equipment churning up the shallow, braided Taku, which is the most productive salmon-bearing river in southeast Alaska.

A third option is also being mulled by Chieftain Metals. It’s the old-fashioned route, used by miners in the 1950s: barge metal out for five months over the summer, then let it pile up during the winter months.

“We want to make sure we understand all the issues” before deciding which transportation route to take, said Wyprysky. And “we need to sort that out this year,” so that the company can complete a new feasibility study by then.

Terrence Chandler, who headed Redcorp, is part of the new venture, as Chieftan Metals’ executive vice-president.

The company’s board of directors includes Phil Fontaine, former national chief of the Assembly of First Nations. His connections ought to come in handy—the project’s past foes have included the Taku Tlingit First Nation of Atlin.

Another board member is Raymond Mah, chief operating officer of Yukon Zinc Corporation’s Wolverine mine near Watson Lake. Given Mah’s recent experience in building a mine in the North, he’s a “natural fit,” said Wyprysky.

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